"I respect your right to be lower tax jurisdictions. I believe passionately in lower taxes as a vital driver of growth and prosperity for all."

This raises several questions. First, whatever happens on transparency, these jurisdictions' zero-tax status create gigantic opportunities for global abuse, from transfer pricing shenanigans to offshore trusts. So there is a massive lack of coherence here, right from the get-go. Second, Cameron believes in lower taxes. But lower than what? In the case of the tax havens, he cannot mean lower than zero. So what is he talking about here? Second, why does he think that 'lower taxes' are a driver of growth and prosperity. Where, exactly, is the evidence?

Next:

"There is no point in dealing with tax evasion in one country if the problem is simply displaced to another."

On the face of it, this is a nonsense argument. Defenders of the status quo often say that cracking down is like squeezing a balloon: activity is displaced elsewhere, while the volume of the balloon stays unchanged. Cameron's words "there is no point" seem to lie firmly in this belief system. But that isn't at all how things work in the real world. It's more like squeezing a sponge: you squeeze in one place, and you catch some and you lose some. Tax evaders, deprived of the easy options, will go to more exotic, risky and difficult locations. Many won't go to the trouble, and they will instead choose to obey the law. That's imperfect, but it's called progress. Still, Cameron's point that greater international cooperation and coherence here makes it easier for everyone is a good one.

Next:

"We also need to ensure information exchange works effectively for all, particularly the poorest countries in the world. That is why we strongly support the Multilateral Convention on Mutual Assistance in Tax Matters. I know many of you have been considering joining and I ask you all to commit to do so in the run-up to the G8 Summit."

That's good, as far as it goes. As is this one:

"I very much welcome the commitments you have made to automatic tax information exchange, both on a bilateral and multilateral basis."

Yes, and this is good to see. Though one question that this begs is: just how 'multilateral' will this be? Will this only help rich countries, or will it be rolled out to those vulnerable countries that need it most? What will be the position inside Europe on the EU Savings Tax Directive? This is the opportunity to put into place the improvements, the amendments to the Directive, and hopefully this week Luxembourg and Austria will be called to account on this by European leaders. It's too early to tell, but this important recent paper from Itai Grinberg plays a crucial role in addressing these questions.

Next:

"Dealing with tax evasion is not just about exchanging information. It is also about improving the quality and accuracy of that information. Put simply, that means we need to know who really owns and controls each and every company. This goes right to the heart of the ambition of Britain’s G8 to knock down the walls of company secrecy.
. . .
[Tax havens' action plans on beneficial ownership] will need to provide for fully resourced and properly managed centralised registries, that are freely available to law enforcement and tax collectors, and contain full and accurate details on the true ownership and control of every company.

Now that stuff in bold is very good to see. We like it, as far as it goes - but a reminder from Robert Palmer of Global Witness.

"It's
only really meaningful if accompanied by transparency eg open
registries of beneficial ownership of companies & *trusts*"

Even this does still, however, beg a number of questions.

First, why only companies? These are important, for sure, but what about trusts? These are a gargantuan part of the British offshore system, and there's nothing specific about them. (Very often, trusts are higher up the ownership tree than companies: the companies are typically owned by a trust.) An earlier statement only said information exchange "also includes information on certain accounts held by entities, such as trusts" - which, as we blogged recently, raises all sorts of other questions.

Second, which countries' law enforcement agencies will get access to to these registries? Will it only be those rich countries with sufficient political muscle to be able to intimidate the small tax havens into shaping up? Or will the books be opened to, say, Tanzania's tax authorities? Will it be possible for them to search the registries for evidence of what their citizens are up to, without having to find the evidence first? Or will information from these registries be available only once you have the smoking gun on a particular criminal or taxpayer? Who will police this, and make sure that tax havens don't make a business model out of 'accidentally' failing to do the proper due diligence?

Third, what about 'ownerless' assets - such as those held in discretionary trusts or Liechtenstein foundations? How will they be tackled?

We're not saying that this statement doesn't reflect progress: it does, albeit from a pathetically low base. But we know from long experience that tax havens' core business models involve the creation of loopholes - and how serious is the UK government in ensuring that the loopholes are plugged?

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About Me

The Tax Justice Network (TJN) is an international, non-aligned network of researchers and activists with a shared concern about the harmful impacts of tax avoidance, tax competition and tax havens.
www.taxjustice.net